Accredited Investor Definition

In some instances, some people may be able to invest in your business without meeting the definition of an accredited investor. These people are known as qualified investors. Ursula concept of a qualified investor, the most common it criteria that it needed is that the individual, despite the fact that they may not meet the accredited investor definition by the Securities and Exchange Commission, is fully qualified to make an informed decision as it pertains to raising capital for your venture without being credited investor. For instance, if the individual that you're raising capital from is a registered investment advisory, and does not meet the net worth requirements for income requirements as outlined by the securities and exchange commission, then they certainly may be able to obtain capital from this individual simply due to the fact that the Securities and Exchange Commission and related state-based securities understand that this individual can make an informed decision as it pertains to investing in your business on an ongoing basis for a one time investment. However, this is somewhat risky as the rules for finding qualified investors versus accredited investors is slim. In short, if you are seeking private placement investors, venture capital financing, private equity funding, or other forms of financing that do not come from traditional lending means then it is imperative that you have the appropriate counseling place to ensure that any person that provides capital with your firm is able to be considered to be an accredited investor. However, it should be noted that some exceptions apply depending on the amount of capital your raising. These exceptions, in regards to how you intend to raise the money for your business, vary on a state to state-based depending on the individuals that you're raising capital from as well as how you intend to market your business as any company that is seeking capital from the general public. In many of our previous discussions, the most likely fact is that you will not be able to effectively market to the general public that the securities offerings that you intend to provide to the general public as it relates to your business activities. Again, this is primarily due to objections by the Securities and Exchange Commission as it relates to the public marketing of securities for sale. If you intend to market your securities for sale on an open market basis then you may fall into the category of economy a publicly traded business. As such, is imperative that you have the appropriate counsel that can show you one which harms all appropriate investors for the type of capital that you are seeking as it relates to your ongoing business activities as it pertains to the expansion and development of your company. Although this series of articles is intended to provide you with tertiary information as it pertains to raising capital while providing information related to the accredited investor definition - there is no substitute for professional advice, coming from an attorney for a certified public accountant, that can provide you with a better understanding of what laws and rules are pick up old to your capital raising activities.

 

Again, turning to our discussion as a relates to the accredited investor definition, you can be assured that any venture capital firm, private equity firm, insurance company, bank, while other financial station will most likely be able to be considered as an accredited investor as it pertains to your ongoing capital raising activities. If you are doing your own research as it pertains to obtain capital from third parties that we strongly recommend that you thoroughly review the laws that are posted on the securities and exchange commission website as it relates to specific exemptions and rules pertaining to accredited and sophisticated investors. Any time that you have a question as to whether or not you're operating within the framework of the law as it relates to private placement investors, angel investors, with other financial situations are able to provide you with the financing that you need and you absolutely need to attend the services of a securities focus law firm that can provide you with ongoing advice as it pertains to be expansion of your business.

 

The fact that accredited investors are hard to find it should be noted that you may need to work with a number of different firms so that you can place the capital you need on an ongoing basis that has a substantial number of contacts with individuals, insurance companies, banks, and other financial institutions that are well versed in accredited investor definition. On an ongoing basis we are going to continue focus of our discussions as many individuals who have very promising entrepreneurial activities on should be able to receive a capital a need with minimal trouble. However, the first issue when receiving the new capital for your business is working with accredited investors and other financial institutions that provide you with this capital on an ongoing basis so that you can effectively watcher business expand over a three, five, or seven year time frame as it relates to the ongoing operations of your company. If you are unable to find accredited investors on your own accord they may be in your best interest, again, to work with a private placement broker that can effectively work with you on an ongoing basis to ensure that you're able to receive the financing that you need in exchange for a significant feat that they will take as it relates to obtain capital on your half.

 

As we've discussed throughout this article, finding accredited investors is a difficult process. However, by working with a securities and exchange commission licensed private placement broker, you will be in an excellent position to effectively find the financing that you need in order to continue your business operations, develop business activities, for putting the new product/service to the open market for the capital that you can be acquired through these third parties. Although this will lead to a discussion that will have in the future, many of these firms typically charge substantial upfront fees as well as substantial success fees based on their ability to provide you with introductions to accredited investors.

 

In addition to working with private placement brokerages that are licensed by the securities exchange commission you may also want to work with capital introduction firms that have a number of accredited investors (as defined by the Securities and Exchange Commission) within their Rolodex that are willing to make significant investments into your business. Much like private placement brokerages these firms take a significant commission any time that an accredited investor makes an investment into your business the production that made between you and the investor that is able to legally (as per accredited investor definition) provide you with the capital that you need to develop expand your business operations. Anytime you work with any of these firms, whether it is a capital induction firm then you to make sure that they are appropriately licensed to do so not only by the Securities and Exchange Commission but also by state-based securities rose that oversee the operations of Hal capital is raised within their specific jurisdiction. You can easily ensure that you're working with a legitimate firm by checking with your state securities bureau as to whether or not the individual form that you intend to work with is appropriately licensed to demand the capital that you need to develop business operations for is able to work on your path when securing financing from third-party accredited investors. In many instances, they can quickly do a search online to make sure that the form that you are entertaining as a potential partner to you as it pertains to your capital raising activities is legally allowed to work on your path in regards to your accredited investor capital raising activities.

 

As it pertains the definition of an accredited investor is imperative that you understand that if you're working with friends and family then they may not into this specific definition as allied by the Securities and Exchange Commission. However, there are a number of different exemptions that are available so that individuals that may not fall into the accredited investor definition are able to provide you with the capital that you need in order to develop, launch, or expand your business operations. This is primarily due to the fact that when you raise capital from friends and family that these transactions are not considered to be arms length transactions. If your family invests into your new business is usually considered to be a non-arms length transaction in the fact that there is not a tremendous vested interest on behalf of your family members that are providing you with the capital that you need as it relates to your ongoing business activities. However, it should be noted, that in certain state restrictions investments by friends and family are considered to be securities transactions as it relates to raising capital for your business. If so, then having a qualified attorney can make the appropriate determination as to whether each investment that is made into your firm is considered to be an arms length transaction.

 

Through our continued discussion of articles as it relates to raising capital from accredited investors, venture capital firms, private equity firms, and other financial institutions – we will continue to focus on the qualities that are related to the issues that pertain to your capital raising activities as per accredited investor definition. Of course, these articles are intended for informational purposes only and we strongly recommend that if you are seeking capital from an accredited investor or  from a qualified investor that you ensure that you have the appropriate legal and accounting counsel in place so that you can ensure that your main with the letter of the law not only as it pertains to the federal laws relating to securities but also to state laws pertaining to the specific jurisdiction that you're operating. Again, these articles are for information purposes only and an investor that is willing to make the investment should be met with appropriate counsel to ensure that you remain with again the letter of the law as it pertains to the ongoing development of your business, the expansion of your business and your ongoing investment activities as it relates to receiving funding for your company so you can aggressively expand your business for a substantial time..

 

Thank you again, for tuning in to TheFinanceResource.com and we continue look forward to provide you with insightful information as it pertains to your investment activities as it relates to capital raising, investments and your business sourcing financing from accredited investors, as well as sourcing financing from firms that specialize in making investments into developing and expanding businesses.